The company's stock soared in value by 142 percent. Its total market value doubled. It pulled off a sizable merger, sailed through a restructuring and seems to have recovered from 1998, one of its worst years ever.

Check. Check. Check.

To show its appreciation, Motorola's board handed the chief executive $58.9 million in cash compensation, stock awards and stock options, making him not only the highest-paid CEO among Chicago's biggest companies last year, but also the highest highest-paid in Motorola's history.

But Galvin's pay matters far beyond the bounds of his Schaumburg-based electronics giant, because it offers an insight into two developing trends.

One is the unending explosion of CEO pay, largely triggered by bigger and bigger stock option grants and more recently by the awarding of restricted stocks--a device usually viewed as a golden handcuff to keep CEOs from jumping ship.

In the case of Galvin--the grandson of Motorola's founder and son of a former CEO--he received $42.6 million in stock options and $13.1 million in restricted stock. The board of directors' rationale is that it not only wanted to tie his financial rewards more closely to the performance of the company's stock, but also wanted to show that if the company does well, so will its CEO. That seems to be Corporate America's mantra today.

The other trend is how the dot-coms, high-tech start-ups and other stalwarts of the new economy have shaken up the landscape by luring executives from old-economy companies with multimillion-dollar packages and the promise of even bigger rewards after initial public offerings.

Fearful of losing their executives, more and more companies are boosting CEO pay packages, even if their stocks are declining and the hot CEO candidates are younger, second-tier executives. The result is a wage inflation sweeping through the CEO ranks.

These issues were very much on the minds of Motorola's directors as they set salaries last year, said Samuel Scott, the outside director who heads the compensation committee. "Motorola has been a good company for others to take talent from," explained Scott.

Many Chicago-area companies seem convinced that they can overcome the dangers of a volatile stock market and hang onto their CEOs by giving more perks, more benefits, more salary, more bonuses and more restricted stocks. Like everywhere else in Corporate America, more is the theme.

"It looks like companies will pay about anything" to land or keep a sought-after executive, said George Paulin, president of Frederic W. Cook & Co., a New York-based pay consultant.

Among the CEOs of the 100 biggest publicly traded firms in the Chicago area, the median cash compensation package--salaries, bonuses and other payments--was nearly $1.1 million last year. Tacking on the estimated value of stock options awarded, restricted stock and other long-term payments, the median compensation for the CEOs jumped to $2.5 million, according to figures compiled for the Tribune by William M. Mercer Inc.

In salaries alone, the median was 6 percent higher than in 1998; the median overall cash payment rose 8.5 percent.

But salaries and bonuses play a small role in many CEOs' compensation: Stocks and other forms of long-term payments made last year accounted for about 60 percent of their total annual compensation.

And stocks clearly helped swell the compensation packages of CEOs last year. In 1998, 10 Chicago-area CEOs had cash and stock packages totaling $10 million or more. Last year, the number rose to 15.

Heeding a 1994 law that requires companies to pay taxes on CEO salaries over $1 million, only eight Chicago-area firms went over that cap, up from six in 1998.

What is striking about the overall surge in CEOs' compensation is that it took place in a year when nearly half of the companies that had a full year of stock trading saw their shares decline, even though major market indexes were up.

Stock options give executives the right to buy shares at a set price at a certain future time. If the stock rises, the difference between the grant price and the stock price when the option is exercised is profit. If the stock price falls below the grant price, it is virtually worthless. A restricted stock is stock given to executives that can be kept after a set period--regardless of whether the price went up or down.

Nationwide, a study of 362 of the nation's top companies by Business Week showed that the CEOs' cash compensation and stock grants climbed by an average of 17 percent, reaching $12.4 million last year.

This occurred in a year when the average pay increase for all workers, adjusted for inflation, was 2.6 percent and the median salary was $28,550, according to the U.S. Bureau of Labor Statistics.